Last year, identity fraud resulted in $56 billion in losses, according to the 2021 Identity Fraud Study from Javelin Strategy & Research. Of this, $13 billion is attributable to traditional identity fraud in which consumers have no idea how their information was stolen.
"At the heart of identity theft is personally identifiable information such as (your) Social Security number, date of birth, birthplace etc.," says Will Mendez, cybersecurity expert at CyZen, a cybersecurity consultancy. "Unfortunately, in today's interconnected world, its extremely hard to keep that information safe from attackers."
Not all fraud rises to the level of identity theft, and by itself, a security breach doesn't constitute a stolen identity. Rather, identity theft happens when someone uses your personal information to open new financial accounts, file tax returns or even make fraudulent medical claims. Not only is it a crime that can cost you money, but it could require significant time and effort to resolve.
To minimize the damage, here are 10 steps to take once you realize you may be a victim of identity theft.
File a claim with your identity theft insurance, if applicable.
Notify companies of your stolen identity.
File a report with the Federal Trade Commission.
Contact your local police department.
Place a fraud alert on your credit reports.
Freeze your credit.
Sign up for a credit monitoring service, if offered.
Tighten security on your accounts.
Review your credit reports for mystery accounts.
Scan credit card and bank statements for unauthorized charges.
1. File a claim with your identity theft insurance, if applicable.
If you have an identity theft protection plan, your provider should be able to guide you through many of the following steps. Companies such as LifeLock and Sontiq sell identity theft protection plans, but even if you haven't purchased coverage, you may have it through an insurer or employer.
"One of your first calls should be to your insurance companies or human resources department," says Adam Levin, co-host of the "What the Hack with Adam Levin" podcast. Some employers offer identity theft resolution services as a job benefit, while insurers may roll it into their products. For instance, Chubb offers complimentary identity theft resolution services to its policyholders.
2. Notify companies of your stolen identity.
Don't wait to notify any company where fraudulent transactions or accounts have occurred. Call them immediately to alert them to the problem.
In cases of account takeovers, your credit card number might be compromised but thieves may not have access to your personal information. "That can be solved many times by picking up the phone and calling the credit card issuer," Levin says.
However, if someone is opening up accounts in your name, impersonating you or using your Social Security number, you may want to proactively contact other companies and agencies. For example, you should notify the IRS if your Social Security number was used to file an income tax return; this can be done by submitting a Form 14039 Identity Theft Affidavit.
Likewise, if someone is impersonating you, alert your health insurance company in case they attempt to obtain medical care under your name or policy number.
3. File a report with the Federal Trade Commission.
The FTC compiles information about identity theft cases. It doesn't have the ability to pursue criminal charges, but its information may be used by law enforcement agencies such as the FBI to track down perpetrators.
To file a report with the FTC, visit www.identitytheft.gov. As part of the reporting process, you'll receive a recovery plan and even prefilled letters and forms that can be used to file police reports and dispute fraudulent charges.
Keep in mind that identity theft is defined as impersonating another person or using their information for financial gain. A stolen credit card number or security breach does not have to be reported to the FTC.
4. Contact your local police department.
The next step is to file a report with your local police department and ask for a copy of it for your personal records.
"That's a good document to have on hand," says Donna Parent, chief marketing officer for Sontiq, a company providing intelligent security solutions. It creates a paper trail that could be useful in the future. For instance, if someone uses your information to commit a crime, having documentation of identity theft could make resolving the matter easier.
Although the police may not be able to do anything if your identity was stolen by criminals online and overseas, your report could help them track down someone who is stealing information locally.
5. Place a fraud alert on your credit reports.
Next, follow up with the three major credit bureaus – Experian, Equifax and TransUnion – and request a fraud alert be placed on your account. The fraud alert stays on your credit report for a year, and it notifies any institution that pulls your credit report to the fact your identity may be compromised.
"The creditor is going to look more closely at the person applying to make sure it's you," Levin says. You only have to request a fraud alert from one of the credit bureaus, and that company should notify the other two firms. Requesting a fraud alert is free.
6. Freeze your credit.
For an added layer of protection, Parent recommends identity theft victims initiate a credit freeze as soon as possible. This will completely cut off access to your credit report and means the credit bureaus won't share it with anyone who requests it.
Credit freezes can also be a smart way to protect children from identity theft. If a child's Social Security number is compromised, "it can go undetected for years," Parent says. However, a credit freeze eliminates the possibility of someone opening accounts with their number.
You'll need to contact each bureau individually to request they freeze your credit. The process is free, and you can lift the freeze at any time.
7. Sign up for a credit monitoring service, if offered.
If your information was accessed in a data breach, you may be offered complimentary credit monitoring. These services watch credit reports for suspicious activity and send alerts whenever a new account is opened.
If you aren't offered free credit monitoring, you can sign up for a reputable service yourself. Credit monitoring is available from LifeLock and IdentityForce for as little as $9.99 a month. Plus, some companies offer free services, such as CreditWise from Capital One.
8. Tighten security on your accounts.
Now is the time to review passwords, and using a password manager, such as LastPass and Dashlane, is an easy way to ensure all your accounts have strong passwords. Also, remain vigilant for future problems.
"Many times, we get notifications that we simply ignore," Mendez says. "However, we should really review notifications we get, especially if they deal with financial accounts or accounts that may contain our sensitive information." In particular, he recommends watching for alerts about password resets, unrecognized transactions and unsolicited push notifications associated with account logins.
Other ways to avoid future instances of identity theft include shredding documents with personal information, not carrying your Social Security number in your wallet and not clicking on links in emails from suspicious or unknown senders. Delete any personal information such as addresses and phone numbers off public profiles on social media and other sites. Whenever offered, enable two-factor authentication, which will require both a password and a code delivered via email, text or phone for access to an account.
9. Review your credit reports for mystery accounts.
Whether you're a victim of credit card fraud or a stolen identity, you need to check your credit reports for any accounts you may not recognize. Once your personal information has been stolen, it could be circulated and sold on the dark web. That means identity theft fraud isn't a one-time occurrence but could happen again in the future.
By law, you're entitled to at least one free credit report from each agency each year. However, during the pandemic, people can request a free credit report weekly from Experian, Equifax and TransUnion. While plenty of websites and creditors promise free credit reports, the official site to request them is AnnualCreditReport.com.
10. Scan credit card and bank statements for other unauthorized charges.
In addition to your credit reports, pull up your other accounts and scan old statements for other charges you don't recognize. "You'll want to see if there is any fraudulent activity on those statements," Parent says.
Don't forget to review dormant or infrequently used accounts as well. If you find unknown charges, call the financial institution to alert them of the problem and request the account be locked or closed.
Identity theft victims should talk to their financial institutions to determine how best to avoid further damage. In most cases, that will involve closing and reopening accounts, even ones that haven't been compromised. It can be a tedious process, but a necessary one to avoid a thief from gaining future control of your money.
Author: Maryalene LaPonsie
Date: Oct. 14, 2021, at 12:10 p.m.